Commercial Equipment Loans - Business Funding | The Loan Phone

Commercial equipment loans provide businesses with funding to purchase machinery, vehicles, technology, and other productive assets without depleting working capital. In Australia, rates typically range from 6-14% p.a. depending on business strength and asset type (indicative only), with loan amounts from $5,000 to $5 million+ and terms from 1-7 years.

Most lenders require businesses with active ABNs and minimum 12-24 months trading history, though specialist lenders may consider newer businesses.

Modern comparison platforms allow businesses to evaluate options from 100+ lenders efficiently, with settlements possible within days for straightforward applications (subject to lender and circumstances).

What Is a Commercial Equipment Loan?

A commercial equipment loan is secured financing where the purchased equipment serves as collateral. Businesses use these loans to acquire assets essential for operations, growth, or replacement of aging equipment without large upfront capital expenditure.

Common equipment financed includes manufacturing machinery, construction equipment, commercial vehicles, medical devices, hospitality equipment, technology infrastructure, and agricultural machinery. The equipment itself secures the loan, typically resulting in more competitive rates than unsecured business finance.

For comprehensive guidance on equipment finance structures and options, detailed reviews compare various approaches to business equipment funding.

Types of Commercial Equipment Finance

• Chattel Mortgage - The business owns the equipment from day one while the lender holds a mortgage until repayment. Popular for tax benefits through depreciation deductions and GST input tax credits. Learn more about chattel mortgage options.
• Commercial Hire Purchase - Similar to chattel mortgage but ownership transfers at term end. Often used when businesses want lower deposits or specific end-of-term flexibility.
• Equipment Lease - The lender owns the equipment; the business makes lease payments. At term end, options typically include returning equipment, extending the lease, or purchasing at residual value.
• Unsecured Equipment Finance - Available for smaller equipment purchases or established businesses with strong credit. Higher rates reflect lack of security, but faster approval processes often result.

Rates, Terms and Costs

Indicative Rate Ranges (2025):

• Established businesses (2+ years, strong financials): 6-9% p.a.
• Standard businesses (1-2 years trading): 9-12% p.a.
• Developing businesses or specialist equipment: 12-14%+ p.a.

Rates are indicative examples only. Actual rates depend on business strength, credit profile, equipment type, and lender assessment.

Typical Terms:

• Light equipment/technology: 1-3 years
• Commercial vehicles: 3-5 years
• Heavy machinery: 5-7 years
• Loan amounts: $5,000 to $5 million+

Common Fees:

• Establishment fees: $300-$995 (may vary by lender and application channel)
• Monthly account keeping: $10-$30
• PPSR registration: $50-$150
• Documentation fees: Vary by lender
• Early repayment fees: May apply depending on loan structure

Eligibility Requirements

Business Criteria:

• Active ABN and business operations
• Trading history: Typically 12-24 months (varies by lender)
• Demonstrated repayment capacity
• Business and director credit checks
• Financial documentation (varies by lender and loan amount)

Equipment Requirements:

• Business use (typically 51%+ business purpose)
• Clear title and legitimate purchase documentation
• Equipment with established resale markets
• Reasonable remaining useful life for used equipment

Eligibility criteria may vary by industry, loan amount, and equipment type. For self-employed business finance or ABN holder loans, specialist lenders often provide flexible pathways.

Benefits of Commercial Equipment Loans

• Preserve Working Capital - Finance equipment purchases without depleting cash reserves needed for day-to-day operations, inventory, or unexpected expenses.
• Potential Tax Benefits - Depending on structure and individual circumstances, businesses may claim depreciation deductions, interest deductions, and GST input tax credits. Tax benefits depend on your specific business structure and circumstances—consult your accountant.
• Predictable Cash Flow - Fixed repayments allow accurate budgeting and financial planning over the loan term.
• Asset Ownership - With chattel mortgages and hire purchase, businesses build equity in productive assets rather than renting or leasing indefinitely.
• Growth Enablement - Acquire equipment necessary for business expansion, new contracts, or capacity increases without waiting to save full purchase amounts.

Application Process

Traditional Approach:

• Research lenders individually
• Submit separate applications to each
• Wait for multiple assessment processes
• Compare offers manually
• Choose best option and proceed to settlement

Streamlined Comparison: Modern platforms allow businesses to submit one application reaching 100+ lenders, receive multiple options for side-by-side comparison, and access specialist broker support for complex scenarios. Compare equipment finance options efficiently across the full market.

Industry-Specific Applications

Different industries have unique equipment finance needs:

• Construction - Excavators, loaders, trucks, and earthmoving equipment
• Healthcare - Medical equipment, dental equipment, diagnostic technology
• Manufacturing - Industrial machinery, production equipment, automation technology
• Transport - Commercial trucks, delivery vehicles, fleet expansion
• Hospitality - Kitchen equipment, refrigeration, point-of-sale systems
• Agriculture - Tractors, harvesters, irrigation systems

Speak with Specialists

Need expert guidance on your commercial equipment loan application?

Email: loans@loanphone.com.au   Website: www.loanphone.com.au

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Last updated: October 10, 2025